Get Your Life Insurance Quotes Today

Insurance

Birth Date Contact

Insurance Glossary

Insurance terms and glossary:

  • Beneficiary – The beneficiary of the policy is the person or entity that receives the benefits. For disability insurance, the beneficiary may be the same person as the insured. In the case of life insurance, the beneficiary and the insured would be different people.
  • Convertible – A convertible term policy provides the ability to trade the term policy for a permanent insurance policy,without a medical exam. This is commonly used to provide lifetime coverage for people who have term policies that have subsequently become uninsurable.
  • Critical Illness Insurance – A type of insurance where a lump sum is paid out if the insured contracts one of a list of specified conditions such as cancer or heart attack.
  • Death Benefit – The death benefit is the amount paid upon the death of the insured. The exact amount is the face amount (insurance coverage) plus an additional benefits. For most policies the face amount and the death benefit are equal. For universal life insurance polices, the death benefit equals the face amount plus the amount of any investments.
  • Decline – If an insurance company determines that the risk is unacceptable, or simply that the required premiums are beyond what the expect a consumer would pay, they may decline to provide insurance coverage entirely. If the decision is permanent, it’s called a decline. If the decline is for a temporary period after which the insurer may reconsider, the decline is called a postponement.
  • Dividends – Life insurance policy dividends are provided on certain types of policies. They are not directly based on the performance of the company, but are often disclosed to be based on the performance of the block of insurance policies.
  • Face Amount – The amount of insurance coverage provided in a life insurance policy. For most policies, the face amount will be the same as the death benefit.
  • Guaranteed Issue Life Insurance – A life insurance policy with no acceptance requirements.
  • Incontestibility Clause – The policy clause that provides for an insurance company to deny a claim in the first two years of the policy based on information provided (or not provided) by the applicant during the application.
  • Insured – The insured is the person who will trigger the insurable event.
  • Life Insurance – A general type of insurance where a benefit is paid upon the death of the insured.
  • Long term care insurance (LTC) – This insurance is commonly confused with long term disability insurance. Long term care insurance provides benefits for should the insured need to reside in a long term care facility when they are older.
  • Long Term Disability Insurance (LTD) – Insurance that provides benefits based on income, paid upon the disability of the insured. The benefits would be paid for an extended period of time, for example for 5 years or to age 65.
  • Owner – The owner of an insurance policy is the person or entity that pays for and controls the policy. In most cases the insured and the owner are the same person, but this is not a requirement.
  • Premium Tax – Various provinces charge a small premium tax (generally less than 3%). In most life insurance policies these taxes are included in the premium. With universal life insurance they are discrete and seperate.
  • Rating – If a higher than normal risk is percieved by the insurance company, the company may ask for additional premium, called a ‘rating’. Ratings come in two forms, a flat extra (or a dollar amount for each $1000 of coverage) or a percentage of base premium. Ratings can be either permanent or temporary.
  • Renewable – A renewable term policy includes the ability to automatically renew a life insurance policy at the end of the initial level term. In years past renewability was an attractive option, today’s term life insurance policies do not offer attractive renewable premiums.
  • Seggregated Funds – A type of investment offered by insurance companies. The term seggregated is used because these investments are seperate from the general investments of the life insurance company.
  • Short Term Disability Insurance (STD) – Insurance that provides benefits based on income, paid upon the disability of the insured. The benefits would be paid for a short period of time, generally less than a few months.
  • Simplified Issue Life Insurance – A life insurance policy with a limited number of medical requirements for acceptance. Typically the requirements consist of a limited number of medical questions.
  • Suicide Exlusion Clause – The policy clause that provides for an insurance company to deny a claim based on suicide in the first 2 years of the policy.
  • Term Life Insurance – A type of life insurance where premiums are level for number of years (the number of years is the ‘term’).
  • Term to 100 – Permanent life insurance where the premiums are level for life and no cash values are available upon cancellation of the policy.
  • Travel Insurance – Travel medical insurance is insurance designed to cover unexpected medical costs for travel outside of Canada or outside of province.
  • Underwriter – An underwriter is the person who reviews the application and makes the decision to accept or decline the coverage. In the life insurance industry this person would have extensive medical training and would be reviewing the medical exam of the applicant.
  • Universal life Insurance – A type of permanent life insurance that has an insurance component, and an investment component. The insurance component is typically one of either level for life, or annually increasing.
  • Whole Life Insurance – A type of permanent life insurance that features coverage for life and a cash surrender value upon cancellation of the policy.
0 comments… add one

Leave a Comment